While January means many different things to different people (including getting on the ball with those New Years resolutions!), the shift to 2014 should mean one thing to everyone: it’s time to start getting ready for tax season.
Though Tax Day still might seem like it is a long way off, you can be certain that it will quickly creep up on you if you keep putting your taxes off. Even those of us who have scrambled with our taxes at the last minute in the past, have a hard time getting into the “tax mode” in early January.
Yet getting your taxes under control now can make filing them less frustrating and time consuming in the next few months. And filing your tax return sooner (January 31st is the earliest they will be accepted this year) will also net you your refund sooner.
The tips below will help the average Joe or Jane get their taxes ready for the new tax season. Heck, I’d make getting an early start a New Years resolution in and of itself.
1. Round Up Your Paperwork
The first step to getting ready for tax season is rounding up your paperwork and getting it in order. Whether you are going to have a CPA help you with your return or go about it yourself, you are going to need to have the proper paperwork handy.
Your previous year’s tax return, your driver’s license (or other ID), and your social security card are essential documents. Furthermore, those that were married or changed their name for another reason will need to promptly apply for a new social security card so that it is updated with their new name before tax time.
2. Decide Between a CPA and DIY
There are pros and cons to both hiring a CPA to do your taxes and doing it yourself (DIY). Online programs like TurboTax can save you a lot of money but should generally only be used by those with relatively uncomplicated returns. There is nothing worse than making costly mistakes or spending way more time than you need to wading through a DIY tax return.
While a CPA might cost you more money upfront, they can often save you more money overall. Because they know what they are doing, they have your tax return done extremely quickly and without risk of error.
3. Talk to Your Family
If you are going to be filing a joint return with a spouse, then it is important to make sure they are on the same page as you. Gather up their important documents at the same time that you are rounding up yours.
On the same note, it is important to talk to any teenage children who might be filing tax returns as well. If your child has a part-time or full-time job, you should figure out if they want to claim themselves as a dependent or not.
In most cases, teenagers should not claim themselves. This is because they rarely make enough money for this to make logical sense. In fact, tax returns are often rejected because of miscommunication between parents and children, where both the parents and the teen have claimed the teen as a dependent.
4. Have Patience
As mentioned above, tax season sucks. It can be tempting to just get everything finished as early as possible. Yet rushing through the process won’t help anything. You need to wait until every single required form has arrived before you file. Those who work multiple jobs and will thus have multiple W-2s arriving need to be especially patient. Amended returns are much more costly than original returns and should be avoided at all costs.
Take your taxes into your own hands this year and don’t wait until the last minute! It’s already January and there is no reason why you shouldn’t get ready for tax season today. The four tips above will help you ease into the process in an organized and calm manner. When you start early, filing your tax return really isn’t as difficult as it seems.